FDIC – Sterling Bank, Lantana, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with IBERIABANK, Lafayette, Louisiana, to assume all of the deposits of Sterling Bank.

The six branches of Sterling Bank will reopen on Monday as branches of IBERIABANK. Depositors of Sterling Bank will automatically become depositors of IBERIABANK. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage.

As of March 31, 2010, Sterling Bank had approximately $407.9 million in total assets and $372.4 million in total deposits. IBERIABANK did not pay the FDIC a premium for the deposits of Sterling Bank. In addition to assuming all of the deposits of the failed bank, IBERIABANK agreed to purchase essentially all of the assets.

The FDIC and IBERIABANK entered into a loss-share transaction on $244.3 million of Sterling Bank’s assets. IBERIABANK will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $45.5 million. Compared to other alternatives, IBERIABANK’s acquisition was the least costly resolution for the FDIC’s DIF. Sterling Bank is the 97th FDIC-insured institution to fail in the nation this year, and the eighteenth in Florida. The last FDIC-insured institution closed in the state was Metro Bank of Dade County, Miami, on July 16, 2010.